Welcome to Chapter 12 of our order management guide. This chapter will explain why automation is essential to order management.
Automation is a big deal in e-commerce, not just in order management. In many industries, automating steps is almost always seen as a plus. It’s all about improving efficiency.
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Can Order Management Be Automated?
Yes, in fact, it may surprise you, but every OMS (Order Management System) is built upon automation. Automation is the backbone of order management software; without it, OMS solutions simply wouldn’t work.
For example, automation is what pulls orders from marketplaces and centralizes them at one interface. It is the bare minimum of what you should expect from an OMS.
Whenever information is shared between software, services, solutions, plugins, etc., that is done by automation—you don’t need to manually input any information; the OMS does that for you.
If automation were not possible, there would be no OMS. It would be impossible to handle orders as you would have to input them one at a time. Preparing to ship a single order could take you a very long time.
However, while automation is an OMS’s primary selling point, the degree of automation offered by different solutions can vary.
Different OMS solutions will market different features as ‘automation,’ but know that it is all automation.
This all begs the question, what do we mean when talking about automation in order management when everything is already automated? What else can the OMS do for you that you don’t necessarily need to do yourself?
Well, there’s always room for more automation. Many parts of the order management process can be automated further, and it is wise to explore how that may benefit your business.
Though many of the tasks that can be automated are small, automating many small processes can have vast effects throughout your business.
What Are the Benefits of Automated Order Management? 8 Most Important
Automating your order management processes has many benefits. For many businesses, it is a top priority. The primary benefit of automating order management is that it increases productivity, but that impacts many things.
1. Automate Mundane Tasks
The most obvious benefit of automation is that it removes our need to work on mundane tasks. Often, these are small things that are unnecessarily done by people.
These tasks can include order entry, billing processes, order acknowledgment, and inventory updates—there are many examples. With automation, you don’t need to keep re-entering or copy-pasting information to different programs or platforms.
2. Free up Time for Other Tasks
As a result of point 1, you can dedicate more of your time to more critical tasks, which is often promoted as the top benefit of automation.
In order management, you can dedicate more time to handling customer requests and other delicate tasks that might not always get the time they deserve.
Most importantly, your business can focus on tasks that can grow your business, not just handling day-to-day orders.
3. Reduce Human Error
According to an article by Forbes, the error rate of manually entered data is 1%. People make mistakes all the time. It is normal, but a small mistake can cause many problems later. Mistakes can be expensive, take time to amend, and frustrate customers.
People can forget things, overlook details, and input the wrong information, and orders can get confused. The wrong quantity can be sent or an incorrect address used, etc. The more manual tasks you have, the more chances you have for an error.
Handing simple tasks, like data entry, to automation can reduce the chance of that happening. According to sources, as much as 50% of order management tasks can be automated, dramatically reducing the risk of human error.
4. Automatic Data Capture
Automating order management tasks enables data collection every time an automated action happens. This means more accurate information and real-time data, which has enormous benefits.
This data can also inform other processes in your workflow. For example, you can automatically collect customer data and history, better forecast when you need to reorder, and track orders in real-time—all this would not be possible without automation.
Meanwhile, when actions are completed manually, you might not have a record of it, and you can’t be sure who did what, when, and how long it took.
5. Helps You Remain Competitive
Resisting automation is a major risk for your business. Your competitors are already automating their order management processes and improving their workflows, and they will overtake your business.
Your competitors will become more consistent in their service, and you should be able to at least match them. If you are not consistent, your customers will go to them.
6. Can Improve Scalability
When mundane, simple tasks are automated, you can handle a higher workload. This dramatically improves productivity and the number of orders you can handle.
In addition, there is less of a need to rush in busy periods—in fact, what defines a ‘busy period’ now might be very different because the many small but time-consuming tasks are cut from the equation.
Improving productivity is one of the top benefits of automating order management tasks, and it has a knock-on effect on company growth as you can take on more orders without problems.
7. Can Lower Operational Costs
Automating order management tasks can lower labor costs as the workload is reduced to handle each order.
With employees working fewer hours and operational costs down, your business will be more profitable, and revenue can be reinvested into other business areas to help growth.
According to a McKinsey survey, automation can reduce costs by 10-15%.
8. Improves Customer Satisfaction
As you become more efficient by automating tasks, you become more dependable, and a knock-on effect of that is that you can keep your customers happier.
You will deliver faster with fewer incorrect orders, preventing customer complaints and gaining more positive reviews.
The same McKinsey survey also noted that the increase in efficiency brought on by automation also improved customer interactions and satisfaction as it “lets businesses handle orders more quickly and accurately.”
How to Automate Order Management?
The best way to automate order management is often with an OMS that automates your most time-consuming tasks.
As mentioned above, automation can vary depending on the OMS you use. An older OMS might not feature as much order management automation as a younger rival.
Furthermore, many OMS solutions are built by companies acquiring other solutions and stitching them together. When companies do this, it can cause integration problems and make it hard for data to be shared.
This is a good reason to thoroughly research any solution you encounter. Ideally, seek a solution built from the ground up, like Sellercloud.
What can be automated changes constantly. OMS solutions often introduce more ways to automate things, so always look into updates and changes.
They can also offer customization and plugins that allow you to automate more features. Not all OMS solutions enable this, and more complex tasks are more challenging to automate.
When considering what would be the most beneficial to automate, examine your tasks to see what you think is taking too much time or where the most errors occur.
You should also analyze your workflows step by step to look for parts of the process that can be automated.
Finally, it is worth noting that automating inventory management and related processes can also improve order management.
Key Points From Chapter 12
You now know why automation is crucial to order management. Remember these key points.
- Automation is central to how OMS solutions work. All OMS features rely on some degree of automation, and some OMS solutions offer more automation than others.
- Order management can be automated in various areas, particularly mundane tasks, and it can profoundly affect your entire business.
- Order management automation’s biggest benefits include reduced human error, lower operating costs, improved scalability, and enhanced customer satisfaction.
- The best way to automate order management is with a solid OMS. OMS solutions that allow customization can enable you to automate more processes.
In the next chapter, we’ll explain common order management challenges.